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SAT quashes Sebi ban on DLF


DLFIn a precedent-setting ruling, the Securities Appellate Tribunal quashed the three-year ban imposed by the Securities and Exchange Board of India on DLF and its top executives. It also came down heavily on the regulator for its harsh est ever action. While the realty giant has already gone through five months of debarment, the SAT order will help it tap markets for raising necessary funds for business, including through REITs and mortgage-backed securities.

In a span of less than six months, the realty major DLF and its promoters not only got their access back to the securities market but the body that barred them received a severe rap on its knuckles for handing over the harsh est ever regulatory punishment in the country. In a majority order of 2:1, the Securities Appellate Tribunal (SAT) on March 13 quashed the ban imposed on DLF, its promoters and key executives and also ruled that the Securities and Exchange Board of India (Sebi) had completely failed to approach the issue in the matter pragmatically. “Viewed from any angle, the impugned order is like a troubled sea whose waters only cast up mire and dust and, therefore, the same is liable to be quashed and set aside”, it said.

The two members pulled up Sebi for lapses in its investigation into the case while stating that it was the job of merchant bankers to ensure proper disclosures in IPO documents. The order also said DLF suffered huge losses to the tune of thousands of crores of rupees in its market value after Sebi’s ban.

The two members also pulled up Sebi for lapses in its investigation into the case while stating that it was the job of merchant bankers to ensure proper disclosures in IPO documents. The order also said DLF suffered huge losses to the tune of thousands of crores of rupees in its market value after Sebi’s ban.

DL--621x414The order also questioned a “somersault” done by Sebi after seven years of the IPO and said that the entire case is based on a complaint filed by a person with 11 Vested interest”.

One dissenting member on the tribunal wanted the ban to be reduced to six months.

Immediately after the SAT judgment, DLF issued a statement to the media welcoming the order. Though the company’s legal brains are immersed in studying its wider implications and it is still to come out with any detailed comments on the order, DLF did reiterate its “faith in the country’s judicial system.”


The Sebi on October 1 0 last year had barred DLF as well as its six top executives, including Chairman and main promoter KP Singh, from the securities market for three years for “active an deliberate suppression 11 of material information at the time of its IPO.

Besides KP Singh, those barred from the markets included his son Rajiv Singh (Vice- Chairman), daughter Pia Singh (Whole Time Director), Managing Director TC Goyal, former CFO Ramesh Sanka and Kameshwar Swarup, who was ED-Legal at the time of the company’s public offer in 2007. While Singh, his two children and Goyal were still on the board of DLF, Sanka had already left the company.